Thu, Jul. 16, 3:24 PM
- "The operating beat (ex-benefit) vs. our estimate was driven by growth in management fees and modestly lower than forecast compensation expenses," says Jefferies' Daniel Fannon, reiterating a Buy rating and $38 price target on Schwab (SCHW +2.8%). "Higher interest rates remain the primary driver to earnings growth; however, asset growth continues at an industry leading pace."
- Also reiterating a Buy rating (and $39 price target), S&P Capital's Ken Leon sees 22% revenue growth in 2016 thanks to rising rates.
- Modestly positive consensus revisions could be at hand thanks to the top-line beat and more favorable interest rate backdrop, says Nomura's Steven Chubak, reiterating his Neutral rating and $31 price target. He awaits further guidance from management at Schwab's July 24 Summer Business Update.
- Source: Barron's
- E*Trade (ETFC +2.5%), TD Ameritrade (AMTD +2.2%)
- Previously: Schwab +1% as results top estimates (July 16)
- Previously: Charles Schwab beats by $0.01, beats on revenue (July 16)
Fri, Jul. 10, 10:58 AM
Tue, Jun. 23, 9:43 AM| Tue, Jun. 23, 9:43 AM | Comment!
Mon, Jun. 22, 2:44 PM
- Financials sunk along with Treasury yields last week, but are seeing a strong bounce today alongside a ten basis point gain in the 10-year yield to 2.36%.
- The XLF is up 1.6% versus the S&P 500's 0.7% gain.
- Helping U.S. equity markets is movement toward a Greek debt deal which sent Europe's Stoxx 50 hurtling 4% higher on the session. Yields tumbled in the periphery, but are sharply higher in Germany as well as the U.S.
- Yield-sensitive Bank of America (BAC +1.8%) is leading the TBTF names higher. In regionals: PNC Financial (PCN -0.2%), KeyCorp (KEY +1.2%), Regions Financial (RF +1.4%), SunTrust (STI +1.3%), First Niagara (FNFG +1.2%).
- Life insurers: MetLife (MET +2%), Prudential (PRU +1.6%), Lincoln FInancial (LNC +1.4%). Online brokers: E*Trade (ETFC +3.3%), Schwab (SCHW +2.2%), Ameritrade (AMTD +1.3%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, KIE, IAT, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KBWR, KRU, RWW, RYF, KBWP, KBWI, FINZ, KRS
Tue, Jun. 9, 8:34 AM| Tue, Jun. 9, 8:34 AM | Comment!
Fri, Jun. 5, 1:22 PM
- Upgrading its view of the sector to Attractive from Neutral, Goldman reiterates its Conviction Buy rating on E*Trade (ETFC +2%), and boosts Schwab (SCHW +2.8%) to Buy from Neutral. TD Ameritrade (AMTD +1.7%) is presumably rated Neutral.
- Analyst Conor Fitzgerald cites: 1)The long-term trend of household assets moving toward low-cost platforms and the shift from 401(k)s into IRAs; 2)"Unique upside" to interest rates, with 75% EPS growth through a rate hike cycle vs. 25-35% for other financials deemed to be rate sensitive; 3) Valuation, while optically not cheap, still screens as having upside.
- Also of benefit to E*Trade would be a sooner-than-expected sale of its loan portfolio, while Schwab's robo-advisor program could add 10% to EPS growth.
- Previously: Financials on the move as rate hike draws nearer (June 5)
Fri, Jun. 5, 10:27 AM
- This morning's strong nonfarm payroll report may put to rest the idea of a continuing economic slowdown and puts on the table a rate hike maybe as soon as September.
- The 10-year Treasury yield is up nine basis points to 2.40%.
- The KRE +1.5%, KBE +1.6%, and the XLF +1.1% amid a flat S&P 500.
- Regional banks: Regions Financial (RF +3.3%), KeyCorp (KEY +2.5%), PNC Financial (PNC +1.9%), SunTrust (STI +2.3%), U.S. Bancorp (USB +2.2%), Zions (ZION +3.7%), First Niagara (FNFG +1.4%)
- Too Big Too Fails: Citigroup (C +2.2%), Bank of America (BAC +3.4%), JPMorgan (JPM +2.2%), Wells Fargo (WFC +1.9%)
- Life insurers: MetLife (MET +2.7%), Prudential (PRU +2.8%), Sun Life (SLF +1.9%), Lincoln Financial (LNC +2.5%)
- Online brokerage: Schwab (SCHW +3.8%), TD Ameritrade (AMTD +2.8%), E*Trade (ETFC +2.3%), Interactive Brokers (IBKR +2.5%)
- Previously: Jobs up 280K in May; UE rate ticks higher (June 5)
- Previously: Treasury yields surge amid strong job gains, boosted wage growth (June 5)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KBWR, KRU, RWW, RYF, FINZ, KRS
Mon, May 11, 8:52 AM| Mon, May 11, 8:52 AM | Comment!
Wed, May 6, 12:06 PM
- Alongside its upgrade of Schwab to Buy, BAML cuts TD Ameritrade (AMTD -0.3%) to Neutral from Buy, as the team sees it as reaping less benefit from rising rates and as being more exposed to competitive pricing pressure.
- A buyout of E*Trade (ETFC -0.8%) has been speculated about for some time thanks to the company putting its legacy issues behind it, and BAML says Schwab and Ameritrade make logical buyers, as do other firms who may want to grow their retail footprint (Goldman has been speculated as a buyer in the past).
- Previously: Schwab ekes out a gain after upgrade (May 6)
Tue, Apr. 21, 8:19 AM
- Q1 net income of $189M or $0.35 per share vs. $194M and $0.35 one year ago.
- Commission and transaction fees of $350M vs. $374M one year ago.
- Net interest revenue of $149M vs. $146M. Insured deposit account fees of $205M vs. $202M. Investment product fees of $85M vs. $75M.
- Total operating expenses of $507M vs. $489M.
- Net new assets of $16.3B vs. $12.2B a year ago. Average client trades per day of 476,590 vs. 491,963.
- Pre-tax margin of 35.7% vs. 39%. ROE of 15.7% vs. 16.9%.
- Conference call at 8:30 ET
- Previously: TD Ameritrade misses by $0.01, misses on revenue (April 21)
- AMTD -1.7% premarket
Tue, Apr. 21, 8:13 AM
Mon, Apr. 20, 5:30 PM
Tue, Apr. 14, 7:26 AM
Mon, Apr. 6, 12:10 PM
- Excepting Schwab (NYSE:SCHW) which pre-announced a Q1 miss, electronic broker stocks had a good first quarter, including Interactive Brokers (NASDAQ:IBKR) up 16.7%, E*Trade (NASDAQ:ETFC) up 17.7%, Gain Capital (NYSE:GCAP) up 8.3%, and TD Ameritrade (NYSE:AMTD) up 4.1%.
- Fundamentals, however, aren't looking so strong into Q2, says Sandler O'Neill, expecting DARTs to decline about 10% in March, and noting the flatter yield curve.
- The team is still bullish, though, thanks to the longer-term optionality from rising interest rates, capital returns/deployment, and acquisitions. For E*Trade, it's capital deployment, for Schwab the ability to sweep both money-market fund and off-balance-sheet deposits into its bank, and for Ameritrade the chance to boost the buyback. For the whole group, keep M&A in mind.
Mon, Mar. 30, 4:20 PM
Fri, Mar. 20, 10:41 AM
- Details aren't available, but the Fed news this week - rates lower for longer - surely played a part in Goldman's downgrade of TD Ameritrade (AMTD -0.1%) to Neutral from Buy.
- Profits at the discount brokerage shops have been hampered by ZIRP thanks to money market fee waivers, and the chances of a June rate hike lessened this week after the Fed cut its forecasts for GDP growth and inflation.
- Ameritrade fell nearly 3% on the open following the downgrade, but has since recovered.
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
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